[RTC List] FYI: Broadband strategy

[Rick Gustafson]

www.chicagotribune.com/news/nationworld/chi-tue_nowifi0828aug28,1,5523756.st
ory

chicagotribune.com
TRIBUNE EXCLUSIVE
City disconnecting from Wi-Fi vision
By Jon Van

Tribune staff reporter

August 28, 2007

 Chicago is curtailing its digital dreams, deciding to back away from
municipal Wi-Fi service after failing to reach agreement with either of two
companies that sought to build a wireless Internet network in the city.

The move comes as municipal broadband wireless projects around the country
face difficulties, and EarthLink Inc., a major player in the field, is
re-evaluating its future in municipal Wi-Fi.

As envisioned in early 2006, Chicago was expected to become one of the first
big cities in the country to blanket its streets and neighborhoods with a
wireless Internet signal that would allow residents access to the Web in
their homes and wherever they traveled in the city.

But technology is advancing and the cost of online access for consumers is
declining so dramatically that Chicago has other avenues to promote more use
of the Internet. As a result, the Wi-Fi deal lost luster when negotiations
bogged down, according to sources close to the matter.

Chicago officials had intended that the city would offer infrastructure, but
no cash, to a carrier that would use its own funds to build the network
here. EarthLink and AT&T Inc. submitted proposals to the city, but after
months of negotiations the parties were unable to reach agreement.

The companies sought a commitment from Chicago to be an "anchor tenant,"
agreeing to pay to use the Wi-Fi network to support city services, but the
city declined.

Taking its proposal request off the table for re-evaluation "is entirely
appropriate for the city," said Tom Hulsebosch, vice president of municipal
sales for EarthLink. "We're seeing this evolve as we learn more about these
networks, and the city needs to think about this again from its own business
perspective."

It might be possible for the city to spend money on Wi-Fi services that it
now spends on other communications, he said, but that would require
rethinking the budget.

A few years ago when San Francisco, Philadelphia, Houston and other cities
jumped into Wi-Fi, officials thought paying less than $20 a month to get a
high-speed Internet connection anywhere in the city would find a lot of
takers. They also thought advertising could support citywide free
connections.

Results on both scores have been generally disappointing. In Lompoc, Calif.,
which activated its $2 million Wi-Fi network almost a year ago, the city
signed up fewer than 500 users out of a population of more than 40,000.

"There's a serious dose of reality, much needed, that has come into play
after all the hype last year about free, ad-driven Wi-Fi," said Craig
Settles, a wireless business strategist and consultant based in Oakland.

The most successful municipal Wi-Fi networks are those devoted to improving
public safety and other city services, Settles said. Helping less-affluent
residents get fast Internet access also can be a goal, he said, but it
requires much more than just firing up a wireless network. Getting computers
and training for the poor is a greater challenge, he said.

"We think that municipal services and public safety are at the sweet spot
for a Wi-Fi network," said Blair Klein, a Chicago-based spokeswoman for the
company. She said anchor tenancy has been a key point for the company in all
its discussions of municipal Wi-Fi.

A primary goal of Chicago's request for proposals to build a wireless
network was to assure that all city residents had high-speed Internet access
at affordable prices. Municipal Wi-Fi was one aspect of that goal, but
getting hardware, software and training to city residents is also necessary,
said a city official, who spoke on condition of anonymity because an
official announcement is not scheduled until Tuesday.

The city already provides free Internet access at 79 public libraries and at
public spaces like Millennium Park and Daley Plaza and will seek other ways
to expand access, he said.

A Wi-Fi network intrigued Chicago as a low-cost method of blasting an
Internet signal across the city. The system would deploy radio equipment
mounted on light poles and would cover 220 square miles of territory.
Industry sources have estimated that it could cost as much as $50 million to
install the infrastructure and perhaps an additional $150 million to operate
the system for six years.

Chicago never intended to be a leader in municipal Wi-Fi, said a city
official, preferring instead to watch what happened in other cities and
learn from that. Some of what's happening isn't pretty.

In San Francisco, bickering among elected officials has stalled progress for
months. In Houston, where the city council approved a contract with
EarthLink last spring, work on the project has yet to start.

As municipal wireless projects have hit one snag after another, prices for
wired Internet have fallen. AT&T charges $20 a month for speeds of 1.5
megabits a second in Chicago and will provide connections half that fast for
$10 to new subscribers, although more than 10 percent of residences in the
metropolitan area cannot get digital subscriber line service because they
are located too far from AT&T's switching centers.

Even if Chicago declines to back a municipal wireless network, city
residents soon will gain more Internet connection options. Sprint Nextel
Corp. is building a wireless WiMax network here that is due to offer service
next spring. WiMax is a technologic cousin to Wi-Fi intended to cover miles
of territory with a wireless Internet signal via radio spectrum, whereas
Wi-Fi transmits hundreds of feet per transmitter.

Another new wireless network may be built in 2009 after a portion of
spectrum now used for analog television broadcasts becomes available for
Internet connections.

- - -

Stuck on the ground

Municipal wireless projects have faced problems across the country:

*In San Francisco, progress has been stalled for months as elected officials
bicker.

*In Houston, the city signed a contract with EarthLink in the spring, but
work has yet to start.

*In Lompoc, Calif., the city has signed up fewer than 500 users out of a
population of more than 40,000.

----------

jvan at tribune.com


Rick Gustafson

IT Manager

The Sun Valley Group

707 825-5895

707 826-8497 - Fax

707 845-7730 _ Cell


-----Original Message-----
From: list-bounces at redwoodtech.org [mailto:list-bounces at redwoodtech.org] On
Behalf Of Sean McLaughlin
Sent: Tuesday, August 28, 2007 3:41 PM
To: RTC
Subject: [RTC List] Broadband strategy



"Why ConnectKentucky makes a bad model
for U.S. broadband":  "ConnectKentucky is
largely focused on expanding service through
private providers heavily invested in DSL.  It
has succeeded in getting a majority of residents
in that rural state connected.  But, when it
comes to national policy, consideration should
not stop at just building out current service.
Contrast ConnectKentucky to the goals in
Minnesota where communities are eying fiber
build-outs is the solution.... [A] DSL mindset
will hammer shut the coffin on U.S. compe-
titiveness in broadband connectivity"

 

http://tinyurl.com/3dmj3z



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